Overapplied factory overhead would result if: Group of answer choices a. Factory overhead costs incurred were greater than costs charged to production. b. The plant was operated at less than normal capacity. c. Factory overhead costs incurred were less than costs charged to production. d. Factory overhead costs incurred were unreasonably large in relation to units produced.

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Business

Alisa Owens

5 November, 05:38

Overapplied factory overhead would result if: Group of answer choices a. Factory overhead costs incurred were greater than costs charged to production. b. The plant was operated at less than normal capacity. c. Factory overhead costs incurred were less than costs charged to production. d. Factory overhead costs incurred were unreasonably large in relation to units produced.

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Answers (1)

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Yosef French · Answer 1

c. Factory overhead costs incurred were less than costs charged to production.

Explanation:

An overapplied factory overhead represents the excess amount of overhead used during a manufacturing period compared to the actual overhead incurred during the production or manufacturing period.

Simply stated, an overapplied factory overhead is the amount by which the estimated overhead is above the actual overhead incurred by a factor in the course of production.

Hence, an overapplied factory overhead would result if factory overhead costs incurred were less than costs charged to production.

This simply means that, if the factory overhead cost actually incurred in a production period is less than the estimated factory overhead cost applied, this is an overapplied factory overhead. If reverse of the above is the case, then it is referred to as underapplied factory overhead.

Additionally, if the difference between the two overhead cost is negative, then it is an overapplied factory overhead.